Beyond Green Blog

February 13, 2009

A Plague of Wal-Marts

Watching this gripping animation (h/t Ezra Klein) that charts the spread of Wal-Marts across the country got me thinking. I felt like I was really watching the spread of wage stagnation across the country. I'm not suggesting there's any clarity as to which came first - Wal-Mart or the grinding halt in middle-class wage growth. But Wal-Mart's accelerated growth in the 80s tracks this chart on wage inequality nicely (note the bottom two lines).

It's a pointless chicken and egg debate at a certain level. You can't blame Sam Walton (much less Sebastian Kresge or James Sinegal) for the fact that discounters that thrive on downward price pressure represent the only means most Americans have of maintaining the illusion of a rising standard of living.

As it happens, that same lack of wage growth locked in the necessity of a food system that could produce calories for as little as possible. And it's the fact that Americans' real wages have been flat or falling during the Age of Wal-Mart that makes fixing the food system so implacably hard. Tom Philpott touched on this a little while back, identifying the Achilles Heel in any Pollan-esque remaking of the food system.

The ability to buy plenty of tasty calories on a low-wage salary actually lies at the heart of our economic system. For 30 years, our system has maintained corporate profits through a steady attack on wages. One of the major reasons workers have accepted stagnate wages is, I think, that food prices as a percentage of income have fallen steadily since the 1970s, a trend which went into reverse only last year. (The other is the ready availability of cheap consumer goods made by even-lower-paid workers in China).

Given that reality, it makes little sense to talk about transforming the food system and revaluing food without transforming the economic system and revaluing labor. Pollan never gets too far into those topics.

Any solution that involves the statement, "food needs to be more expensive" is going to be what the experts call a political non-starter. How to restart middle-class wage growth is, of course, the gajillion dollar question - although I agree with Kevin Drum's prescription: More Unions!

But short of that, we're faced with maintaining agricultural subsidies in some form. Right now, all Americans effectively receive food stamps - it's just that for most of us those payments go directly to corn and soy farmers. We can rail against the wastefulness of subsidies all we want. But given that the alternative is higher prices at the grocery store, I agree with Tom Philpott that our focus should be on better rather than smaller subsidies. Exactly how we structure that isn't at all clear, but unless Wal-Mart and its ilk start giving their employees big annual raises, the government is going to have to work to keep food, preferably real food, affordable.

Chart by Ezra Klein

Labels: food, jobs, politics

November 17, 2008

Brother, Can You Spare $25 Billion

What is it with this whole "GM MUST DIE!" meme propagating in the progressive/eco blogosphere? From Matt Yglesias still thinking that somehow it's okay if GM liquidates to the eco-bloggers who seem positively gleeful about GM's possible demise, it really is quite shocking. We just elected the most progressive president since LBJ and now we want him to preside over the mass layoffs of up to three million workers at a cost to the government of, according to Bloomberg, up to $200 billion? In the middle of a Depression?! Judas Priest!! WHAT is UP with THAT?! I do know this - somewhere Herbert Hoover is smiling.

The New Republic's Jonathan Cohn, at least, is having none of it. Nor is Paul Krugman (and he's a Nobel Prizewinner!) Are the Big Three blameless? Far from it. Should some or all of GM senior management be shown the door. Yes: Mr. Lutz, here's your hat. But let them all burn? To say it's an over-reaction is an understatement. Things really are changing in Detriot. The unions have given concession after concession and restructured their labor contracts to reduce the impact of health and pension benefits. And Cohn explains how the improvements are in the showroom and on the factory floor as well:

According to the most recent Harbour Report, the benchmark guide for manufacturing prowess, Chrysler's factories now match Toyota's for the most productive, while both Ford's and GM's are improving. (A Toledo Jeep factory was actually named the nation's most efficient.) Consumer Reports now says Ford's reliability is approaching that of perennial leaders Honda and Toyota, whose ratings actually slipped last year. In late 2010, GM will introduce the Chevrolet Volt, a plug-in hybrid that can go 40 miles without gas, and the Chevrolet Cruze, a compact that relies solely on gas but that gets 45 miles to the gallon. The Volt would represent a rare leap ahead of the Japanese, who never embraced plug-in technology with the same enthusiasm. It's also typical of the better cars that observers say Detroit has in store. "There's a lot of accumulated negativity about these companies out there," says Wharton's John Paul MacDuffie, who directs the International Motor Vehicle Program. "U.S. consumers gave the Big Three the benefit of the doubt for a long time before turning away from them, and now their reputation is worse than their actual performance and progress toward needed reforms."

The Chevy Volt, by the way, is a huge deal. Not only will it be the world's first commercially-produced plug-in hybrid, but it will use a lithium-ion battery. Today's hybrid's use nickel batteries. Nickel mining is highly competitive with coal as the worst, most environmentally devastating, carbon-intensive industry. As a result, every hybrid drives off the lot carrying a "carbon debt" which, according to Wired Magazine, takes over 45,000 of driving to "drive off." Lithium ion is the acknowledged future of battery technology, and GM would be first out of the gate. But better to spite our faces, right?

But wait, there's more! After cheerleading for 3 million pink slips, most bloggers then say, "well, if we HAVE to bail those bastards out, at least attach some "green" strings," as if that's some meaningless little thrown bone. Um, hello? Has anyone been paying attention? Mileage standards have been stuck at around 27mpg for 20 years and will only need to go up another 8mpg over the next 12 years. In one swell foop we could revolutionize those standards, thus breaking a decades long political logjam. As Joe Romm (an eco-expert who supports a bailout) points out, greener cars will play a major role in lowering our carbon footprint. And here comes a once in a lifetime opportunity to show some fortitude and remake an industry. But, no, no. Better to make the "safe" decision and go with the pink slips.

And let's not forget Democrat John Dingell, congressman from Michigan, who has "protected" the auto industry from reform since long before most readers of this blog were born, and would jump on any bailout bandwagon, no matter what the industry was forced to do. Heck, he'd probably eat his Energy and Commerce Committee chairman's gavel if an amendment that so required was attached to bailout legislation, rather than oversee the destruction of the industry.

And I would also suggest that you turn your heads, oh you Big Three killers, and look whose shining face rests on the pillow next to you. It's none other than the GOP, which is honestly and truly gleeful at finally FINALLY destroying one of the last powerful unions left. There are strange bedfellows and there are toxic bedfellows. Just thinking about it makes me want to take a shower.

So, let's stop debating the possibility of bailing on the bailout and start debating the best way to help an industry transform itself for a carbon-neutral future. Can I hear a "Yes, We Can!"

[Updated: 2:30pm] My Blogger Ethics Advisor informed me that in my rush to post this, I neglected to mention that I, like the TNR's Jonathan Cohn, have a family connection to GM. In the wake of an accounting scandal a couple years ago, my father was named to the GM board to help improve financial controls. But you only need to read the above post (especially the bit about Bob Lutz) to see that I am not exactly a mouthpiece for GM. I myself don't own a single share of the company and a GM default would have zero bearing on my finances. The fact that GM itself doesn't want to die and I don't think it's such a hot idea either are about the extent our common ground... That's blogging on an empty stomach for you!

Photo by GM

Labels: jobs, politics, transport

November 3, 2008

Speaking of Hope

I don't usually expect to find hope in the NYT Business section, but this weekend was an exception. An article on green jobs in the Midwest drew what looked to me like a fairly convincing virtuous circle. Let me say that I've been to this point skeptical about green jobs - not that they won't exist, but whether they will represent an engine of job growth that can replace the disappearing manufacturing and low-level white collar jobs, especially in the industrial Midwest. For proof, I just look at Silicon Valley which, for all its success, doesn't actually employ all that many people and never truly replaced the jobs lost in the 90s' collapse of California defense contractors.

That said, this article made me think there could be something to this whole green jobs thing. What's interesting about it is that, as the NYT describes it, proximity has become important again.

The article focuses on the growing wind turbine assembly industry in Iowa. Why Iowa? Well, Iowa is "[p]erched on the edge of the Great Plains -- the so-called Saudi Arabia of wind." These turbines are so enormous that you want to make them as close as possible to the location you want to use them. Off-shoring simply isn't an option. TPI, an Arizona turbine blade company, was looking for a location to site their new plant and ended up in Iowa. The reason - and when was the last time you heard that this mattered for manufacturers:

Although TPI was considering a site in Mexico with low labor costs, Newton had a better location. Rail lines and Interstate 80 connect it to the Great Plains, where the turbines are needed.

Rail lines?! Interstates!? Holy 20th century, Batman! No wonder the Rust Belt is taking notice.

While the proximity issue isn't paramount for every green industry, certainly wind - which may be used to generate one-fifth of US electricity by 2030 according to the DOE - and perhaps even solar (panels are, after all, made of GLASS!) will find that proximity to the customer will matter. If that's the case, we get to our virtuous circle. Like the auto industry of old, which was a web of manufacturers and suppliers based near one another, the clean tech industries may spin something similar, trapping some significant numbers of jobs currently flying overseas. Now that's a hopeful thought for the dawn of a new era, isn't it?

Photo by hddod used under CC license

Labels: energy, jobs